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Fed Divided on December Rate Cut Amid Data Gaps

11/20/2025

Summary

Fed Officials Divided

Federal Reserve officials are divided on a December rate cut.
Minutes from the October meeting show policymakers split on a pause due to inflation above 2%.
The cancellation of the October jobs report complicates the decision, leaving data gaps.
Market expectations place a 34% chance of a rate cut next month, down from earlier predictions.
Upcoming labor market data will be critical in shaping policy.

Summary

Trump Threatens Fed

U.S. President Donald Trump threatens to fire Federal Reserve Chair Jerome Powell and Treasury Secretary Scott Bessent if the Fed does not lower interest rates, speaking at a Saudi investment forum.
The Fed operates independently and remains divided on rate cuts due to ongoing inflation concerns.
Recent Fed minutes indicate some officials prefer maintaining current rates.
Upcoming labor market data, delayed by the government shutdown, could influence future policy decisions.

History

Historical Context

The Federal Reserve Act, enacted on December 23, 1913, established the Federal Reserve System in response to the Panic of 1907, which highlighted the need for a central banking authority to stabilize the economy. This act aimed to prevent future banking panics and regulate monetary policy, a role that remains crucial today as the Fed navigates the balance between inflation control and economic growth.

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Fed Officials Divided

Federal Reserve officials are divided on a December rate cut.
Minutes from the October meeting show policymakers split on a pause due to inflation above 2%.
The cancellation of the October jobs report complicates the decision, leaving data gaps.
Market expectations place a 34% chance of a rate cut next month, down from earlier predictions.
Upcoming labor market data will be critical in shaping policy.

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